What’s new on the retirement front? There could be changes to retirement plans in the near future. The House has passed the SECURE 2.0 Act, it now moves on to the Senate. Here’s what could change in coming years.

What changes are on the horizon?

Here’s a look inside the bill:

• The bill proposes a gradual increase in the age at which individuals must start taking Required Minimum Distributions (RMDs) from their retirement accounts
  • Increased to 73 for 2023
  • Increased to 74 in 2030
  • Increased to 75 in 2033
• Older workers would be able to make bigger contributions to accounts.
  • The $1,000 IRA catch-up contribution limit allowed for individuals age 50 and older would be indexed for inflation starting after 2023
  • The bill would increase the separate catchup amount for employer sponsored retirement plans such a 401k/403b for those ages 62-64 from $6,500 ($3,000 for SIMPLE IRA indexed for inflation) to $10,000 ($5,000 for SIMPLE plans indexed for inflation)
  • Catch-up contributions would be required post-tax
• Employers would be able to give employees the option to put matching contributions into the Roth IRA “bucket’ in their employer sponsored plan such as a 401k,403b and SEP IRA.
• The bill would allow Section 403(b) plans to participate in multiple-employer plans
• The bill would widen eligibility for 401(k) participation for employees who serve at least 500 hours for two years (decreased from three years)
• Participants in SIMPLE and SEP IRA plans would be able to make Roth contributions to their accounts

We will keep you posted as details become finalized. Questions? Contact us.